Influenced by Germany’s post-war social climate, Röpke’s economic and moral insights provide a deeper understanding of markets and why economic principles cannot be separated from human behavior. These truths still ring true and give us insight into our economy today.
Röpke warns against economism, a term he defines as,
[…] the incorrigible mania of making the means the end, of thinking only of bread and never of those other things of which the Gospel speaks.
Falling into an economistic mindset may mean mistaking economic freedom as an end or a virtue in and of itself. Yet he argues that freedom is only the means to choose true virtue. Reiterating this point, he says,
…and it is also economism to forget that people do not live by cheaper vacuum cleaners alone but by other and higher things…
Those who fall to economism risk gaining the world and losing their souls. But what are these “higher things” to which Röpke refers?
Beyond Supply and Demand
Röpke critiques narrow-minded economists by arguing that life isn’t all about the marketplace. Instead, the marketplace is part of a larger whole which also concerns philosophy and theology. Everything in the world is interlocked.
He makes three claims explaining the proper relationship between the market and these “higher things” that are inevitably intertwined with economics:
- The battle between economic ideas is not purely economic, but a spiritual and moral battle.
- The good products that a free market produces are nothing without a social, ethical, religious framework.
- We need a morally sound culture to sustain freedom.
In other words, economic freedom is like a moral sandwich. Virtue presupposes economic freedom, and freedom in return sustains true virtue. Summarizing these points, he says,
Market economy, price mechanism, and competition are fine, but they are not enough. They may be associated with a sound or an unsound structure of society. But whether society is sound or unsound will eventually decide not only society’s own measure of happiness, well-being, and freedom but also the fate of the free market economy.
How can we overcome the temptation to see the world through a materialistic lens? Röpke says,
We need a combination of supreme moral sensitivity and economic knowledge. Economically ignorant moralism is as objectionable as morally callous economism. Ethics and economics are two equally difficult subjects, and while the former needs discerning and expert reason, the latter cannot do without humane values.
In dealing with the economic issues of our day, the free market is not enough, but neither is morality without sound economic thinking. Economic knowledge needs ethics and ethics needs economic knowledge.
Applying Röpke Today
Communism prospers more on empty souls than on empty stomachs.
Though we may think of communism as a system of the past, we can apply much of Röpke’s philosophy to today’s economy.
Superficial arguments for economic freedom based on its material merits are not enough. If we truly want to defend the free market as Christians, we must have more to show than our cheap vacuum cleaners and cheap HD TVs.
A stronger case for economic freedom exists when we point out that morality presupposes liberty. Otherwise, we may blame our sin—selfishness, greed, and lack of charity—on capitalism rather than on ourselves.
We must remember that economic freedom is only a means to higher ends such as “truth, freedom, justice, human dignity, and respect of human life and ultimate values.”
*This article was originally published on the Creativity. Purpose. Freedom. blog.
- Scrooge vs. Röpke: The Limits of Economic Virtue (theamericanconservative.com)
- An Economy Tempered By Love? (thelittleredblog.typepad.com)
- Economics the Cornerstone of Liberty (realeconomics2013.wordpress.com)
- Free Economy and Social Order (joseywales1965.wordpress.com)
- A Biography of Wilhelm Röpke (joseywales1965.wordpress.com)
- Star Parker – Free markets, individual virtue fuel prosperity (crescent-news.com)
- Free Markets Plus Individual Virtue Produces Prosperity (ConservativeActionAlerts.com)
- Preaching Friedman: Economic Freedom vs Political Freedom (thepoliticalpixie.wordpress.com)